US Dollar: Jun '21 USD is Up at 90.205.

Energies: Jun'21 Crude is Up at 70.41.

Financials: The Sept '21 30 year bond is Up 12 ticks and trading at 159.22.

Indices: The Jun'21 S&P 500 emini ES contract is 8 ticks Higher and trading at 4240.00.

Gold: The Aug'21 Gold contract is trading Down at 1895.00. Gold is 14 ticks Lower than its close.

Initial conclusion

This is not a correlated market. The dollar is Up+ and Crude is Up+ which is not normal and the 30 year Bond is trading Higher. The Financials should always correlate with the US dollar such that if the dollar is lower then bonds should follow and vice-versa. The S&P is Higher and Crude is trading Higher which is not correlated. Gold is trading Lower which is correlated with the US dollar trading Up. I tend to believe that Gold has an inverse relationship with the US Dollar as when the US Dollar is down, Gold tends to rise in value and vice-versa. Think of it as a seesaw, when one is up the other should be down. I point this out to you to make you aware that when we don't have a correlated market, it means something is wrong. As traders you need to be aware of this and proceed with your eyes wide open. Asia is trading Mixed with half the exchanges HIgher and teh other half Lower. Currently all of Europe is trading Higher with the exception of the Milan exchange which is Lower at this time.

Possible challenges to traders today

  • Prelim UOM Consumer Sentiment is out at 10 AM EST. This is Major.

  • Prelim UOM Inflation Expectations is out at 10 AM EST. This is Major.

Bias

Yesterday we gave the markets an Upside bias as the Bonds and Gold were both trading Lower Thursday morning and this usually reflects an Upside day. The markets didn't disappoint as the Dow climbed 19 points Higher, the S&P gained 20 and the Nasdaq 109. Today we aren't dealing with a correlated market and our bias is Neutral or Mixed.

Could this change? Of Course. Remember anything can happen in a volatile market.

Commentary

Finally after nearly a week of down or mixed days we finally see some upward trend and correlation. All indices gained ground yesterday as initial Unemployment Claims came in lower than last week by 9,000 and the markets claimed that as a victory. It came in at 376,000 versus 385,000 last week. However inflation may be rearing its ugly head as that came in at 0.6% versus 0.4% expected. This may very well be a temporary situation as the economy is opening we are seeing shortages in many areas and sectors. Case in point automobiles used integrated chips as a major component to control the various systems in a car. Now that the economy is opening up, demand for autos is rising and chips are in short demand which means a price increase and we are seeing that across the board. Time will tell how this all works out but we believe it is a temporary scenario.

Trading performance displayed herein is hypothetical. The following Commodity Futures Trading Commission (CFTC) disclaimer should be noted.

Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.

In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance trading results is that they are generally prepared with the benefit of hindsight.

In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results.

There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results.

Trading in the commodities markets involves substantial risk and YOU CAN LOSE A LOT OF MONEY, and thus is not appropriate for everyone. You should carefully consider your financial condition before trading in these markets, and only risk capital should be used.

In addition, these markets are often liquid, making it difficult to execute orders at desired prices. Also, during periods of extreme volatility, trading in these markets may be halted due to so-called “circuit breakers” put in place by the CME to alleviate such volatility. In the event of a trading halt, it may be difficult or impossible to exit a losing position.

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